Rama Industries Ltd. vs Commissioner of Central Excise

M.M. Kumar, J.—This is an appeal directed against order dated 17-10-2008 (P-4), passed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi (for brevity, ''the Tribunal'') holding that the appellant cannot be given the refund in cash from Cenvat credit account. Learned Counsel for the appellant has urged that the following substantial questions of law would arise for determination of this Court:

(a) Whether refund in cash of Cenvat credit can be allowed in case of closure of the manufacturing unit ?

(b) Whether impugned order of the Tribunal is justified in view of judgment of Karnataka High Court in the case of The Union of India (UOI) Vs. Slovak India Trading Company Private Limited,

We have heard learned Counsel for the parties and have perused the paper book with their able assistance. The matter is covered against the revenue by the Division Bench judgment of Karnataka High Court in the case of The Union of India (UOI) Vs. Slovak India Trading Company Private Limited, , wherein it has been held that Rule 5 of Cenvat Credit Rules, 2002 (for brevity, ''the Rules'') in terms does not prohibit refund in cash of Cenvat credit. On a further appeal against the aforesaid judgment of the Division Bench to the Supreme Court, SLP has been dismissed by holding that the revenue did not file any appeal against many such orders passed by Tribunals at Delhi and Mumbai. The Tribunal at Delhi has passed one such order in the case of 2002 (101) ECR 403 , whereas the Tribunal at Mumbai had passed three such orders, namely, 2004 (169) ELT 162; 2003 (158) ELT 215 ; and 2004 (170) ELT 507 . The Tribunals in all the aforementioned cases have held that the assessee is entitled to refund in cash of the amount deposited if the assessee has gone out of the Modvat Scheme or his unit is closed. The Supreme Court has considered all the aforementioned decisions. Before the Supreme Court it was conceded by the revenue that no appeal had been filed against the orders of the Tribunal. Therefore, the order of the Division Bench of Karnataka High Court was upheld.

In view of the above, both the questions of law raised by the learned Counsel for the appellant deserves to be answered in favour of the assessee and against the revenue.